Ireland

1. Does Ireland have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes.

It is an offence under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) (the “2010 Act”) to engage in money laundering.

It is an offence under the Criminal Justice (Terrorist Offences) Act 2005 (the “2005 Act”) to engage in the financing of terrorism.

2. To whom does the legislation apply?

Money laundering

Any person (individual or corporation) who carries on money laundering in the State is liable to criminal prosecution.

There are circumstances in which individuals or firms who engage in money laundering outside the state may be criminally liable in Ireland e.g, where the money laundering takes place on board an Irish ship or an aircraft registered in Ireland; where the activities amount to a criminal offence in the state where they take place and the individual engaging in the activities in question is a citizen of Ireland or ordinarily resident in Ireland or, in the case of money laundering by a corporation, the corporation is established under Irish law.

Where the criminal offence is committed by a corporation, if it is proven that the offence was committed with the “consent or connivance, or to be attributable to any wilful neglect” of a director, manager, secretary of other officer of the company or an individual purporting to be acting in such a capacity, or a member of the committee of management or other controlling authority of the corporation, any such individuals are also criminally liable.

Terrorist financing

Any person (individual or corporation) who engages in terrorist financing in the state is liable to criminal prosecution.

Where the terrorist financing activities take place outside the state, individuals who engage in these activities may be criminally liable in Ireland in certain circumstances e.g. the activity takes place on board an Irish ship or Irish-registered aircraft; it is committed by an Irish citizen or by a stateless person habitually resident in Ireland; it is directed towards or results in the carrying out of a terrorist act in Ireland or against a citizen of Ireland, or an Irish state or government facility outside of Ireland.

As above, where the offence is committed by a corporation, with the “consent or connivance, or to be attributable to any neglect” of an officer of the company, that individual is also criminally liable.

3. What does the legislation prohibit?

Money laundering

Under Section 7 of the 2010 Act, a person commits a criminal offence if, in relation to property that is the proceeds of criminal conduct, the person:

• conceals or disguises the true nature, source, location, disposition, movement or ownership of the property, or any rights relating to the property;
• converts, transfers, handles, acquires, possesses or uses the property; or
• removes the property from, or brings the property into, the State

and “the person knows or believes (or is reckless as to whether or not) the property is the proceeds of criminal conduct”.

Terrorist financing

Under Section 13 of the 2005 Act, a person commits a criminal offence if the person by “any means, directly or indirectly, unlawfully and wilfully provides, collects or receives funds intending that they be used or knowing that they will be used, in whole or in part in order to carry out” (a) an act that constitutes an offence in Ireland and is within the scope of any treated listed in the annex to the International Convention for the Suppression of the Financing of Terrorism or (b) an act that is intended to cause death or serious bodily injury, the purpose of which is to intimidate a population or to compel a government or international organisation to do or abstain from doing any act.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

See above. Underlying criminal activity has to be proven.

5. What level of intent or knowledge is required to establish a violation?

See above response to no. 3.

6. What are the potential penalties for infringing the legislation?

Money laundering

A person who commits an offence under Section 7 of the 2010 Act is liable (a) on summary conviction, to a fine not exceeding €5,000 and/or imprisonment for a term not exceeding 12 months, or (b) on conviction on indictment, to a fine and/or imprisonment for a term not exceeding 14 years.

Terrorist financing

A person who commits an offence under Section 13 of the 2005 Act is liable (a) on summary conviction, to a fine not exceeding €3,000 and/or imprisonment for a period not exceeding 12 months, or (b) on conviction on indictment, to a fine and/or imprisonment for a term not exceeding 20 years.

7. Does the legislation have extra-territorial reach?

Yes, in certain circumstances, as outlined above.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes.

Part 4 of the 2010 Act sets out various obligations on “designated persons”. Section 25 of the 2010 Act defines the various types of “designated persons”; it includes e.g. financial institutions and trust or company services providers.

Section 60 of the 2010 Act identifies various types of “competent authority” to monitor various types of “designated persons”. In the case of financial institutions, for example, the competent authority is the Central Bank of Ireland (“CBI”). Substantially all designated persons that are “financial institutions” will be regulated by the CBI in any event under other financial services legislation. For certain types of financial services firms that are “designated persons” but are not required to be authorised or licenced to carry on business by the CBI (so-called “Schedule 2 firms”), they are required to register with the CBI.

Designated persons must, for example, carry out a business risk assessment, a customer risk assessment, comply with customer due diligence requirements, report suspicious transactions to the Gardaí and the Revenue Commissioners, and put in place AML policies and procedures.

9. What are the potential penalties for failing to comply with these obligations?

The potential penalty will depend on the specific breach.

A designated person who fails to meet their obligations with respect to conducting risk assessments or reporting suspicious transactions, for example, is liable to criminal prosecution; the potential penalty, on summary conviction, is a fine of up to €5,000 and/or imprisonment not exceeding one year. On a conviction on indictment, the potential penalty is a fine (with no upper limit) and/or imprisonment for up to five years.

Separately, for breaches such as these, the CBI may sanction a regulated firm under the Administrative Sanctions Procedure. The potential sanction includes a fine of up to €10 million or 10% of turnover, whichever is higher. The CBI may also sanction a person concerned in the management of the firm who participates in the breach. The potential sanction for such individuals includes a fine of up to €1 million and disqualification.

In order to address the double-jeopardy issue, if the CBI imposes a financial penalty on a firm, the firm may not be subsequently prosecuted for the same breach (the same applies in respect of a financial penalty imposed on a person concerned in the management of the firm). Also, if the firm (or person concerned in its management) has been charged and found guilty (or not guilty) of a criminal offence in relation to a potential breach, the firm (or individual) cannot subsequently be fined by the CBI.

10. Who are the relevant enforcement authorities in Ireland and what are their contact details?

The Director of Public Prosecutions is responsible for the prosecution on indictment of crime in Ireland, including money laundering and terrorist financing.

The CBI is designated as the competent authority, responsible for monitoring compliance with the anti-money laundering requirements imposed on credit and financial institutions, as set out in Part 4 of the 2010 Act. The contact details for the CBI are:

T: +353 122 460 00

AMLPolicy@centralbank.ie